Mumbai: The State government’s claims of having done away with arcane rules to make it easier for investors has been rubbished by a World Bank assessment report, which says Mumbai remains one of India’s toughest places to do business.
Presented last week to the State government, the World Bank assessment report (a copy is available with The Hindu ) contradicts the government’s claim that the business environment has ‘vastly improved’. It also came with a reminder that Mumbai is a long way from simplifying business procedures.
Not only is it difficult to get an electricity connection from the Brihanmumbai Electric Supply and Transport Undertaking (BEST), obtaining BMC construction permits and filing returns with State government agencies are complicated, the report says. It also points out that dedicated commercial courts are few, and incomplete digitised land records count among the hurdles in setting up new businesses.
The report’s findings have laid governmental exaggeration bare in several sectors. For example, the Devendra Fadnavis-led government had claimed that as per a BEST order (P.O. 232) issued earlier this year, power connections can be availed in less than 15 days. The report says only one such case was found, and the average time for a connection remains 30-55 days. This is because integration of procedures is not complete, the report says.
The BMC’s online single window system for construction permits crashed when it was tested by a WB team. The government’s claims that permits have been reduced to 10 from 42, leading to reduced construction costs, have also been debunked.
“The cost of approval (due to reduction in permits and development charges) as a percentage of construction cost remains much higher when considered by us: 25.3 per cent as opposed to BMC claims of 1.73 per cent,” the report said. The BMC had claimed that approvals now cost a builder Rs. 5,64,753, but the report says this is Rs. 12,78,937.
“The team could not access the MCGM auto DCR (development control rules) portal and found the BMC single window system was not widely being used. While the BMC has claimed both Occupation Certificate (OC) and Commencement Certificates (CC) have been merged, this has not been done,” it said.
Earlier this year, India had moved up one place to 130 in the World Bank’s ‘Doing Business’ ranking.
The report also highlights glitches in registration of VAT certificates and online payment of taxes. Only 19 per cent of VAT certificates were given in a single day, as claimed by the government, the report revealed. The World Bank has now suggested new targets, including reduction in time for starting new businesses to 27 in 2017 from 29 in 2016. “The getting electricity procedures be cut down to five next year from current seven, and days reduced to 47 from 53,” the report suggested.
Using the WB assessment report to target the government, senior NCP leader Nawab Malik said, “The government has been fooling people with their claims on ease of doing business. The situation on ground hasn’t been simplified by any stretch of imagination; there is only propaganda.”
Senior Congress leader and former revenue minister Balasahab Thorat said the government has done little about digitising land records. “During my tenure, digitisation of 7/12 extracts and assessment of land titles were on course, but these have been brought to a halt by this government. The World Bank has rightly exposed government propaganda,” he said.
